SWIFT’s cross-border data helps determine the process of currency internationalisation by determining the pace of internationalisation of the RMB.
China is the world’s second largest economy constituting approximately 10% of the world’s total GDP. Its current account surplus enables China to play an increasingly important role as a global lender, as well as being a major beneficiary of foreign direct investment, yet China remains a largely domestic financial system with only a partial engagement with the rest of the world. This could be all set to change as China aspires to transform the renminbi (RMB) into an international currency.
The paper titled, “The Internationalisation of the RMB: New Starts, Jumps and Tipping Points”, investigates the pace of internationalisation of the RMB by utilising aggregated cross-border data. The data shows recent cross-border activity in London and New York, though concentration remains in Hong Kong, Macau, Singapore and Taipei.
What constitutes currency internationalisation? How should internationalisation be measured? The paper addresses these key questions in the currency internationalisation debate.
- Judge Business School; University of Cambridge
- Monash University